Council opts to save taxpayers $1.5-million a year ... maybe
The same Saskatoon city council that imposed a six per cent property tax increase this year just voted to save taxpayers $1.5 million a year.
But it might surprise you that five councillors voted against the money-saving measure in one of council's patented 6-5 votes.
And it might further surprise you that the five who voted against it are the same ones who tried, mostly unsuccessfully, to cut spending and lower the tax hike at budget time.
The vote last week approved further exploring the construction by the city of its own composting facility near the landfill.
Coun. Mairin Loewen, who voted for the move, called it the “best deal for residents.” She added “... I can't recall a time where we've been presented with an option that could save residents $1.5 million a year and for council to find that to be inadequate.”
But, like many decisions made at city hall, it's not quite that simple.
A new solution for the city to compost the organic waste it began collecting last year became necessary when the Rural Municipality of Corman Park council voted against allowing the construction of a composting depot by a private company contracted by Saskatoon city hall.
Now, city bureaucrats are saying they can build and operate a facility that will result in cheaper rates for residents.
Unlike recycling, the city's curbside organic waste collection service has emerged as an immediate success, even without a permanent home for the compost.
The private Loraas Disposal North facility has processed more than 18,000 tonnes of material since the program began a year ago. The program's target was between 15,000 and 22,000 tonnes per year.
So last week, council was presented with three options: to continue contracting Loraas to process the material, to seek a third party to try again to build a new facility, or to build a cityowned and operated facility.
The last option would mean the closure of the city's West Compost Depot, which needs to be shuttered one day anyway, since it's located in the path of future residential development.
Angela Gardiner, the city's general manager of utilities and environment, said she's confident, based on similar facilities built by other cities, that the processing plant can be built for $22.1 million or less. It would be funded by a loan paid back through utility fees.
That sounds like it would be more expensive, but it's not, according to city hall's numbers. The city administration pegs the operating costs of the status quo with Loraas at $4.6 million a year and the costs of hiring a third party to build a new facility at $4.7 million a year.
Meanwhile, the city option is estimated at $3.1 million a year. With the first two private options, the per-cart monthly cost is estimated at $3.57, while the public option is lower at $2.69.
Lower costs for taxpayers ... what's not to like?
Not so fast, says Aaron Beres, the district manager for Loraas Disposal Services, who appeared before council to point out that the composting facility it built five years ago north of the city cost 31 per cent more than budgeted due to the lack of “off-theshelf” design options.
Beres has an obvious interest in casting aspersion on the citybuilt facility, since his company benefits from the current situation. But it's also counterintuitive to think government can deliver services more cheaply than the private sector. That's why so much city work is contracted out.
Yet this appears to be a low risk venture. Gardiner assured council that if costs rise for the facility, the politicians will have the option to reconsider.
Presumably, city hall is remaining very conservative with capital cost estimates since two major projects — the new downtown library and the rehabilitation of the Harry Bailey Aquatic Centre — are stalled due to rising prices.
Coun. Troy Davies, who voted against the city-built option, warned of the “tremendous amount of risk.” Other naysayers, like Coun. Zach Jeffries and Coun. Bev Dubois, said they lacked the information needed to make an informed decision.
Mayor Charlie Clark, who voted for it, called it “a particularly unique situation.”
And it will provide a fascinating case study of whether somehow city hall administration can actually deliver the lower costs it promises.